World Gold Council Calls for Cut in Import Duty This will help the organised sector gain market share and reduce smuggling which could surpass 120T this year, says council
Kolkata: The World Gold Council has said the government should reduce the import duty on gold following the introduction of 3% goods and services tax (GST), reasoning that this will help the organised sector gain market share and reduce smuggling of gold which may otherwise surpass 120 tonnes this year.
At present, gold attracts 10% import duty, which was raised in a phased manner by the erstwhile UPA government to put a check on the ballooning current account
deficit (CAD). “The key economic indicators are favourable for reducing the import duty on gold. CAD is under control, rupee is
strong against dollar and the equity market is also robust. This calls for a reduction in import duty on gold,” said Somasunda- ram PR, managing director, India at the World Gold Council. “GST is making the trade tax compliant and bringing in more transparency. So, if the import duty is reduced, then smuggling will come down significantly and make the trade more organised.”
Bullion dealers and jewellers, too, said that the time is ripe for a reduction in import duty. “I think the government can take a decision after looking at GST collection figures on gold. More tax collection will help the government decide on reduction in duty,” said Surendra Mehta, national secretary, India Bullion and Jewellers Association.
Traders said that although underlying concerns about GST and other transparency measures continue, positive sentiment returned with continued remonetisation and expectations of a good monsoon.
This was evident in the sales momentum during Akshaya Tritiya, supported by a higher number of auspicious wedding days during the quarter.
Towards the end of quarter, one of the biggest demand drivers was the goods and services tax rate on gold, which spurred consumers and traders to advance their gold purchases ahead of the GST roll-out on July 1.